Systematic Withdrawal Plan - SWP

DEFINITION of 'Systematic Withdrawal Plan - SWP'

A service offered by a mutual fund that provides a specific payout amount to the shareholder at predetermined intervals, generally monthly, quarterly, semiannually or annually.

BREAKING DOWN 'Systematic Withdrawal Plan - SWP'

Three main reasons for using SWPs are to meet living requirements (usually when retired), for tax planning purposes, or to comply with mandatory retirement plan withdrawal rules after reaching age 70.5.